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Ending China's console ban my not change video gaming

In Hong Kong and on the mainland, handheld devices like the iPhone are the kings of video gaming.

Getty Images (2012)

In Hong Kong and on the mainland, handheld devices like the iPhone are the kings of video gaming.

The Chinese government's announcement of a Shanghai free-trade zone earlier this month should be of particular interest to gamers, because, once again, there are rumors the country will end its 13-year-old ban on video game consoles.

The big question is not whether game companies will jump at the chance to sell consoles and games to 1.3 billion Chinese, but whether it will matter in a country long accustomed to doing without them.

The ban in question stretches back to June 2000, when the government prohibited the manufacture or sale of game consoles on the mainland. The arguments were ostensibly to prevent the nation's youth from being corrupted by violent game content and the resultant sedentary lifestyle.

That didn't stop console-like devices from hitting shelves — as I wrote back in September 2010, these included such ripoffs as the Vii, POPstation and PolyStation 3 — and even a full-blown attempt by Lenovo earlier this year to sell its CT510 as a game console. That particular experiment turned out to be a lot less like Microsoft's Kinect than advertised, and has since withered, in no small part to its $600 price tag. Lenovo sold off its eedoo console subsidiary as a result.

Now, with the Chinese economy cooling down to a mere 7.5 percent in the last quarter, the nation's leaders are looking to keep up the impossible double-digit pace of years past. The result is a special economic zone in Shanghai, similar to the one in Hong Kong. While the larger aim is to make the nation's renminbi a fully convertible currency, the upshot is that there is the very real potential that the console ban will end — with the caveats that hardware must be manufactured and sold from Shanghai.

The move has not been announced yet, and there would likely be a requirement that products be approved by cultural authorities, but it's not hard to believe Nintendo, Sony and Microsoft would be just fine with that if it meant being able to sell to the most populous country on Earth.

"They still need approval from the culture ministry and other relevant government bodies for their products, which I think is reasonable, because the government wants to make sure the content of your games is not too violent or politically sensitive for young people," a source told the South China Morning Post two weeks ago.

While that may make a good cover story, you don't have to dig too deeply into international business to realize the aim may be more to move manufacturing profits from Hong Kong into Shanghai's Pudong district. All three hardware makers contract their console manufacturing to mainland facilities: The Morning Post notes Hon Hai Precision Industry (a.k.a. Foxconn) makes Nintendo's Wii; Flextronics makes Microsoft's Xbox 360; and Sony, Hon Hai and Pegatron all make the PlayStation 3. Hon Hai and Pegatron (a former subsidiary of Asustek) are Taiwanese companies, while Flextronics is an American company with headquarters in Singapore.

In any case, the motive is obviously to get money moving through China proper. The cultural part of the equation, however, is likely to be less about the violent content of games and more about the willingness of Chinese to accept a console-and-disc format.

Kotaku's Eric Jou wrote this week about how the average Chinese electronics consumer is used to shelling out cash for a mobile device like a smartphone, but then using that hardware to download free-to-play apps. Jou noted that the current top five games in China are all free apps, and that of those, only two would even translate to a traditional console format.

That's not to mention how little of the money for the hardware that is being used actually makes it into corporate coffers, thanks to the notoriously pirate-friendly atmosphere of China's gray market. Chances are that consumers in China who both want and can afford to blow money on a video game console already have channels to acquire what they want without much effort.

There is a confluence of factors at work here that make the end of the console ban likely. China's 10-year government rollover brings in leaders focusing on sparking growth and moving money. Match that with a growing desire for luxury goods and the next-gen Xbox One or PlayStation 4 may become the must-have item for the better-heeled among the Chinese.

That raises the issue of how game publishers would respond to a flood of new gamers with distinctly different cultural tastes than the current market, independent of government stipulations about content. Hollywood is already recutting blockbusters like Iron Man 3, complete with characters and scenes either edited out or added in as a way to cater to the eastern audience, and even lackluster efforts like the remake of Red Dawn are heavily altered to keep from offending the Chinese (the aggressors were digitally altered to be North Korean instead of the Red Army, as filmed). Familiar western brands ranging from Chevrolet to KFC are altering their offerings to maximize profits from the mainland. If the free trade zone allows the video game industry in, it's easy to imagine a global shift in the genre to suit the largest audience.

But that's only assuming China will adopt the current global standard for video gaming in the first place.

Joshua Gillin writes about video games and entertainment news for tbt*. Feel free to challenge his opinions at jgillin@tampabay.com.

Ending China's console ban my not change video gaming 07/25/13 [Last modified: Thursday, August 15, 2013 6:24pm]
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